Litigation Capital Management Ltd · LSE:LIT
Litigation Capital Management — H1 FY2022 Earnings Presentation
22 slides from Litigation Capital Management's earnings presentation, Mar 15, 2022
Slide 1: Interim results presentation
Interim results presentation Six months ended 31 December 2021 Litigation Capital Management Limited ACN 608 667 509
Slide 2: HY22 – Highlights
HY22 – Highlights Funds Fund I US$150m now fully committed inside the initial two-year period, notwithstanding disruption due to management COVID. Commitments of Fund II has commenced Fund II Final targeted raise of US$300m fund size is well progressed with final close expected in calendar H1 Revenu
Slide 3: Building scale
Building scale Measures of Maintenance of Increase in AUM growth(A$) investment standards (A$) This financial period has Number of applications experienced the most 10.5 year cumulative Total assets under 196 IRR management – 31 Dec significant disruption due to 79% covid. In each of the three Cap
Slide 4: Interim results highlights
Interim results highlights – exclusive of third-party fund (A$) HY 2022 HY 2021 Change % Gross revenue $19.2m $7.7m 149% Gross Revenue Gross profit $13.8m $5.0m 176% $19.2m Adjusted profit/(loss) before tax1 $7.4m ($0.6m) Statutory profit/(loss) before tax1 $4.3m ($1.2m) Invested capital3 Cash2 $30.
Slide 5: HY22 Balance sheet overview
HY22 Balance sheet overview – exclusive of third-party fund (A$) Capital invested ($m) Total equity ($m) 22.3 100 94.3 18.4 80.4 80.6 80 70.3 13.9 12.8 60 40 20 HY19 HY20 HY21 HY22 0 HY19 HY20 HY21 HY22 Cash generation ($m)2 Cash as at period end ($m) 52.6 20.6 34.7 1 30.3 11.0 10.6 9.2 5.8 HY19 HY2
Slide 6: HY22 cash movements
HY22 cash movements 1 – exclusive of third-party fund ($Am) Litigation Investments Operating activities 20.6 (17.9) Investing activities Financing activities (7.4) 35.5 (2.0) 1.4 30.3 (0.6) (0.1) 0.8 Cash balance Cash Capital Expenses Interest Payments for PPE & Proceeds FX Cash at beginning
Slide 7: Combined portfolio profile
Combined portfolio profile 27 10.5 year average months Portfolio by claim size Portfolio by LFA maturity1 time to completion (A$) (months) Notwithstanding the running average, LCM 11 17 expects the duration of investments to 10 15 increase 14 8 8 7 7 The expectation is that future investments wi
Slide 8: Progress of Investment portfolio
Progress of Investment portfolio Portfolio continues to experience delays as a result of COVID and delays associated with the latest strain, however we are seeing increased momentum and a return to more normal operating conditions Three direct investments resolved intra period with judgments awa
Slide 9: Current portfolio of direct investments
Current portfolio of direct investments Balances as at Portfolio by industry Portfolio by industry Portfolio by region Portfolio by individual 8 March 2022 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ capital (number of projects) commitment)¹ (estimated A$) com
Slide 10: LCM Global Alternative Returns Fund
LCM Global Alternative Returns Fund Balances as at Portfolio by industry Portfolio by industry Portfolio by geography Portfolio by individual 8 March 2022 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ capital (number of investments) commitment) 2 (estimated A$)
Slide 11: Business fundamentals
Business fundamentals Underwriting Development of skill and discipline of investment selection Capital Building experience over time Effective investment in disputes is Origination capital intensive Creation of systems and Sourcing and originating the best methodologies for effective due Ability to
Slide 12: Three year running performance metrics
Three year running performance metrics 250% 34 33 230% 32 32 31 31 31 200% 30 166% 149% 150% 144% 139% 28 Months 26 100% 80.5% 71.1% 65.6% 65.1% 24 58.8% 50% 22 0% 20 FY16-18 FY17-19 FY18-20 FY19-21 FY20-22 Rolling IRR ROIC Time to recovery (months) 12
Slide 13: Track Record
Track Record Commercial arbitration proceedings (English law / London seat) by a company headquartered in Jordan Type of Project against a company incorporated in the Netherlands, in relation to a construction dispute under the auspices of the London Court of International Arbitration (LCIA). Origin
Slide 14: Outlook
Outlook CEO now relocated to London and accelerating growth alongside a highly skilled and motivated team LCM’s business ready for scale through expansion of global origination platform Increased demand for LCM’s capital from corporate clients as instability and uncertainty remain present in global
Slide 15: Appendix
Appendix LCM
Slide 16: Consolidated income statement
Consolidated income statement For the period ended 31 December 2021 Consolidated Consolidated LCM only Fund LCM only Fund HY22 HY21 A$m A$m A$m A$m A$m A$m Revenue from contracts with customers Litigation service revenue 19.1 0.2 19.3 7.5 - 7.5 Increase in employee costs Portfolio revenue - - - 0.
Slide 17: Adjusted profit & EBITDA reconciliation
Adjusted profit & EBITDA reconciliation For the period ended 31 December 2021 Consolidated Consolidated LCM only Fund LCM only Fund HY22 HY21 A$m A$m A$m A$m A$m A$m Statutory profit after tax 2.9 (0.3) 2.6 (1.05) (0.1) (1.2) Add: Depreciation & interest 2.2 - 2.2 0.03 - 0.03 Tax expense 1.4 - 1.4 (
Slide 18: Consolidated statement of financial position
Consolidated statement of financial position As at 31 December 2021 Consolidated Consolidated LCM only Fund LCM only Fund HY22 HY21 A$m A$m A$m A$m A$m A$m Current assets Credit facility continues to Cash and cash equivalents 30.3 13.2 43.4 5.8 9.6 15.4 provide a bridge between Trade and other rec
Slide 19: Consolidated statement of cash flows
Consolidated statement of cash flows For the period ended 31 December 2021 Consolidated Consolidated LCM only Fund LCM only Fund HY22 HY21 A$m A$m A$m A$m A$m A$m Cash flows from operating activities Proceeds from litigation contracts - settlements, fees and reimbursements 20.6 - 20.6 10.6 - 10.6 Pa
Slide 20: Glossary
Glossary Internal Rate of Return (IRR) means the internal rate of return for LCM’s portfolio of Litigation Projects that are managed to Completion. LCM calculates its Cumulative IRR by treating our entire investment portfolio as one undifferentiated pool of capital and measuring inflows and outflows
Slide 21: Important notices and disclaimer
Important notices and disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE REPUBLI
Slide 22: Contact Information
Contact Information Offices Brisbane Sydney Level 54, Level 12, The Chifley Tower 111 Eagle Street, 2 Chifley Square, Brisbane QLD 4000 Sydney NSW 2000 T +61 7 3012 6478 T +61 2 8098 1390 Singapore London Marina Bay Financial Centre Bridge House Tower 1, Level 11 181 Queen Victoria Street 8 Marina B
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